Uber Fights to Arbitrate Waymo’s Trade Secrets Claims

SAN FRANCISCO (CN) – A federal judge gave no indication Thursday whether he would deny Uber’s attempt to force Google spinoff Waymo to arbitrate claims that Uber and a former Waymo engineer stole driverless car technology in the do-or-die race to bring the cars to market.

U.S. District Judge William Alsup alternately chided and agreed with both sides during the hour-long hearing on Uber’s motion to send Waymo’s trade secret and state unfair competition claims to arbitration and stay them pending the outcome while patent infringement claims proceed in federal court. Uber also asked Alsup to freeze Waymo’s motion to bar Uber from using its technology to develop its own driverless cars.

“You’re trying to take advantage of somebody else’s rights,” Alsup told Uber’s attorney over the company’s attempt to invoke arbitration based on an employment agreement between Waymo and Anthony Levandowski – a former Waymo manager who now leads Uber’s self-driving car program. Minutes later, the judge told Waymo’s counsel that “you have no case against Uber without Levandowski.”

Waymo claims Levandowski downloaded 14,000 confidential files from its server just before he resigned in January 2016 and used them to set up a competing company called Otto that same month. The files include ones related to Waymo’s highly secret LiDAR system – a laser-based scanning and mapping technology its driverless cars use to “see” their surroundings.

Uber acquired Otto for $680 million in August 2016, three months after Otto launched publicly. Waymo claims Levandowski met with Uber’s senior executives days before he resigned, and that Uber knew it would be illegally acquiring Waymo’s technology but purchased the company anyway to fast-track its floundering driverless car program.

Waymo sued Uber and Otto this past February over the alleged theft but did not name Levandowski as a defendant. It moved to bar Uber from using its technology two weeks later, a request Uber said in a court filing “would impede Uber’s efforts to remain a viable business” if Alsup grants it.

On Thursday, Uber attorney Michael Jacobs told Alsup that Waymo is legally obligated to arbitrate its claims because they arise out of two employment agreements Levandowski signed with Waymo in 2009 and 2012 that contained arbitration clauses.

And though only parties to an arbitration agreement can invoke arbitration, Jacobs said that nonparty Uber is entitled to do so because Waymo’s allegations are connected to those agreements.

“This case is clearly a dispute regarding the conduct of Mr. Levandowski’s employment at Google,” Jacobs said. “Waymo doesn’t get to pretend these contracts don’t exist in order to avoid arbitration. They want to invoke other laws and say they took reasonable measures for confidentiality, but Waymo chose to have a contract. They can’t litigate this case to avoid that.”

Waymo attorney Charles Verhoeven countered that Uber can’t compel arbitration as a third party because Waymo didn’t name Levandowski as a defendant, and because its claims aren’t based on its employment agreements with him.

“We’re not making our claims based on the employment contract. We’re making our claims based on statutes that protect against trade-secret misappropriation,” he said.

Jacobs shot back that Waymo purposely chose not to name Levandowski as a defendant to dodge its own arbitration requirements, even though its claims focus squarely on Levandowski’s alleged misconduct while he was at Waymo. He pointed out multiple times that Verhoeven had reserved the right earlier in the hearing to sue Levandowski if the case goes to arbitration.

But Waymo says Uber wants to arbitrate so it can avoid public scrutiny, noting in an April 10 brief that Uber attorney Arturo Gonzalez told Alsup during a discovery hearing that arbitration means “at least it’s not in the public where it’s going to be on the front page of The New York Times the next day.”

Gonzalez also said at that hearing that arbitration would permit Levandowski to testify without fear of criminal prosecution.

Levandowski has said he could be criminally prosecuted over Waymo’s allegations, and invoked the Fifth Amendment to avoid testifying and stop Uber from producing potentially incriminating documents in the case.

Alsup denied the request, and the Federal Circuit also denied it on Tuesday.

“We believe Uber should not be permitted to avoid the jurisdiction of the court and move this case to a private arbitration,” a Waymo spokesperson said in an emailed statement Thursday. “We respectfully wait for the court’s views on this important issue.”

Waymo says it learned Uber was using its technology after one of its LiDAR component vendors accidentally copied it on an email containing machine drawings of an Uber LiDAR circuit board that was nearly identical to its own. By then, it had already discovered that Levandowski had swiped thousands of its confidential files.

In an April 7 brief, Uber denied stealing Waymo’s technology, saying that its four-lens LiDAR design is “fundamentally different” from Waymo’s single-lens system, but conceded it currently uses LiDAR systems built by other companies because its own system is still in development.

An Uber spokesperson did not return a request seeking comment Thursday.

Jacobs is with Morrison & Foerster and Verhoeven is with Quinn Emanuel Urquhart & Sullivan, both in San Francisco.